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On Wednesday, Trump took part in the meeting of the heads of state of the NATO countries. For obvious reasons, Trump was in the spotlight.

Trump demanded from NATO member countries to increase defense spending by 4% of GDP. This caused a general surprise: Now, most countries spend significantly less than 2%. In NATO, the goal is to achieve defense spending growth of up to 2% by 2024.

Trump sharply criticized Germany particularly on low defense spending (1.2% of GDP) - and attention for a new gas pipeline from Russia (Nord Stream - 2). Trump accused Germany that it was "subordinated to Russia" because of its dependence on Russian gas imports. Germany now receives 40% of gas from Russia. Merkel parried Trump's accusations, reminding that Germany is the second NATO member after the US for defense spending. Merkel also said that Germany is building up alternative energy and reducing the share of Russian gas.

Trump continued to attack Germany for relations with Russia in an appeal to NATO Secretary Stoltenberg. "We are taking measures against Russia (sanctions) in the US, and then Germany is spending many billions to buy Russian gas. Explain it! ", Trump said.

Merkel, and then Macron had personal talks with Trump, after which they said they were very satisfied with the negotiations.

It is interesting that Trump's attacks on Germany-Russia relations were made a few days before the meeting between Trump and Putin in Helsinki.

The pair continues to trade within the flat framework of the medium-term. Yesterday, another compilation zone was formed, which allows us to determine the direction of trade for the next 3-5 days.

Yesterday's close of the American session occurred below the zone of bank compilation, which indicates a top-down priority of the second half of this week. Any upward movement should be considered for the formation of a reversal pattern. This will allow you to find advantageous prices for the sale of the instrument. The most favorable prices are located within the compilation zone, so it makes sense to set a limit order when this zone is reached.

The size of the take profit exceeds the stop-loss for three times, which makes the sale profitable. It is important to understand that the work is carried out within the flat framework of the medium-term, indicating the need to fix most of the position when reaching the June extremes.

To cancel a downward impulse, it needs to take over yesterday's' decline and close the trades above the zone of bank compilation. This will indicate the set of positions of major players to buy, which in the medium term will lead to the renewal of the July high. The trading plan will require adjustments, and purchases will come to the fore immediately after the close of the American session above the resistance zone.

The USD remains the main beneficiary of trade tensions, which is easy when it has a solid macro back-up. The labor market is growing further, consumption is growing, and in leading indicators, there are no signs of concerns on the part of business and households about the effects of trade wars. Even the Fed officials make constructive comments. Yesterday, Charles Evans, a dove who voted against the hike in December, now sees room for one or two until the end of this year. Moreover, WSJ published an interview with the head of the Fed branch in Cleveland Loretta Mester, who has hawkish views (and the right to vote this year). Mester said that the economy is surely able to sustain two more interest rate hikes this year. In her opinion, if the Fed will postpone increases, it may be late with a reaction to the signs of overheating. According to Mester, the neutral rate is 3.0%. There are no surprises here and the market accepts comments neutrally.

Today in the calendar data on June inflation, where consensus counts on a moderate increase of 0.2% m/m, which will push core inflation to 2.3% y/y. A stronger reading and response of the debt market may become a good catalyst for the USD rally.

AUD, NZD, but also SEK and NOK remain the most sensitive to risk aversion and escape to the USD. Considering China's involvement in the conflict and the pressure on the prices of industrial raw materials, AUD has the most difficult situation and one can expect it to go even further in time. An impressive novelty is the USD/JPY rally, especially as it is in conflict with correlations with the stock and debt market. It seems as if the yen ceased to be treated as a "safe haven" and is seen as the currency of the Asian economy, where foreign trade plays a major role. If there is still someone on the market who wants to hedge the risk by buying a yen, it can now be in an uncomfortable position.

Let's then take a look at the USD/JPY technical picture at the H4 time frame. The market is in a clear uptrend with a local high at the level of 112.62, but the bulls are heading towards the level of 113.37 minimum. The nearest technical support is seen at the level of 111.39. The market conditions are starting to become overbought slightly, but the momentum remains positive and strong.

Recently, USD/CHF has been trading upwards. The price tested the level of 0.9978. According to the H1 time - frame, I found a breakout of the bullish flag, which is a sign that buyers are in control. My advice is to watch for potential buying opportunities. The upward targets are set at the price of 1.0000 and at the price of 1.0050.

Recently, EUR/USD has been trading downwards. The price tested the level of 1.1665. According to the H1 time - frame, I found a potential bearish flag pattern in creation, which is a sign that buying looks risky. My advice is to watch for potential selling opportunities if you see a valid breakout of the flag pattern. The downward targets are set at the price of 1.1600 and at the price of 1.1530.

Recently, Bitcoin has been trading downwards. As I expected, the price tested the level of $6.048. According to the H1 time - frame, I found an end of the upward correction (running flat), which is a sign that buying looks risky. I see strong selling pressure on the market and my advice is to watch for potential selling opportunities on the rallies. The downward target is set at the price of $5.767.

$6.237 Intraday resistance;

$6.048– Intraday support;

$5.767 – Objective target ;

With InstaForex, you can earn on cryptocurrency's movements right now. Just open a deal in your MetaTrader4. *The market analysis posted here is meant to increase your awareness, but not to give instructions to make a trade.

The EUR/USD pair continues to move downwards from the level of 1.1752. This week, the pair has dropped from the level of 1.1752 to the bottom around 1.1678. Today, the first support level is seen at 1.1694, the price is moving in a bearish channel now. Furthermore, the price has been set below the strong resistance at the level of 1.1752, which coincides with the 50% Fibonacci retracement level. This resistance has been rejected several times confirming the veracity of a downtrend. Additionally, the RSI starts signaling a downward trend. As a result, if the EUR/USD pair is able to break out the first support at 1.1694, the market will decline further to 1.1623 in order to test the weekly support 2. Consequently, the market is likely to show signs of a bearish trend. So, it will be good to sell below the level of 1.1752 with the first target at 1.1663 and further to 1.1566. However, stop loss is to be placed above the level of 1.1810 (61.8% Fibonacci retracement levels).

The major resistance is seen at the level of 0.7474. The AUD/USD pair fell from the level of 0.7474 towards 0.7348. But, the price rebounded from the bottom of 0.7348 to trade around the spot of 0.7474 again. The resistance is seen at the levels of 0.7474, 0.7513 and 0.7554. Moreover, the price area of 0.7474/0.7513 remains a significant resistance zone. Therefore, there is a possibility that the AUD/USD pair will move downside and the structure of a fall does not look corrective. The trend is still below the 100 EMA for that the bearish outlook remains the same as long as the 100 EMA is headed to the downside. Thus, amid the previous events, the price is still moving between the levels of 0.7474 and 0.7257. If the AUD/USD pair fails to break through the resistance level of 0.7474, the market will decline further to 0.7302 as the first target. This would suggest the bearish market because the RSI indicator is still in a negative spot and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 0.7257 so as to test the daily support 3. On the contrary, if a breakout takes place at the resistance level of 0.7554, then this scenario may become invalidated.

The pivot point is seen at the point of 1.3190 on the H1 chart. Right now, the price is still trade around the point of 1.3190. The USD/CAD pair probably continues to move downwards from the level of 1.3190, which represents the double top on the H1 chart. The pair dropped from the level of 1.3190 to the bottom around 1.3130. Today, the first resistance level is seen at 1.3227 followed by 1.3190, while daily support is seen at the levels of 1.3130 and 1.3093. According to the previous events, the USD/CAD pair is still trapping between the levels of 1.3227 and 1.3093. Thus, we expect a range of 137 pips in coming hours. The first resistance stands at 1.3227, for that if the USD/CAD pair fails to break through the resistance level of 1.3227, the market will decline further to 1.3130. This would suggest a bearish market because the RSI indicator is still in a negative area and does not show any trend-reversal signs. The pair is expected to drop lower towards at least 1.3093 in order to test the second support (1.3093). On the other hand, if a breakout takes place at the resistance level of 1.3224 (50% Fibonacci retracement levels), then this scenario may become invalidated.

AUD/USD has been quite volatile with the bearish trend it had started till it bounced off 0.8150 area with a daily close. Despite recent struggles on the USD side, AUD failed to gain momentum against USD.

Recently, after the worse-than-expected NFP report, USD failed to sustain the momentum it had over AUD. However, despite the positive economic reports from Australia, AUD lost ground again leading to bearish pressure in the pair. Recently, Westpac Consumer Sentiment report was published with a significant increase to 3.9% from the previous value of 0.3% and Home Loans increasing to 1.1% from the previous negative value of -0.9%. Today, AUD MI Inflation Expectation report was published with a slight decrease to 3.9% from the previous value of 4.2% which is currently helping AUD to gain certain momentum in the process.

On the other hand, today US CPI and Core CPI reports are going to be published and the indices are expected to be unchanged at 0.2%, Unemployment Claims are expected to decrease to 226k from the previous figure of 231k, and Natural Gas Storage is expected to decrease to 55B from the previous figure of 78B.

At present, AUD has been quite firm with the recent economic reports but failed to gain momentum because pending US economic reports are also well forecasted. So, better than expected readings may lead to further gains on the USD side in the coming days. The likelihood of another rate hike in the US is bullish for USD. Nevertheless, AUD may struggle to sustain its gains.

Now let us look at the technical view. The price is currently showing certain bullish pressure at the edge of 0.7350 area from where it is expected to push lower towards 0.7050 area in the coming days. The trend is still bearish but volatile which might lead to certain correction along the way down towards 0.70 area. As the price remains below 0.75 area with a daily close, the bearish bias is expected to continue.

The USD/CHF pair is still trading above the pivot point of the price 0.9857. The USD/CHF pair faced resistance at the level of 0.9943. The strong resistance has been already formed at the level of 0.9943 and the pair is likely to try to approach it in order to test it again. However, if the pair fails to pass through the level of 0.9943, the market will indicate a bearish opportunity below the new strong resistance level of 0.9943 (the level of 0.9943 coincides with a ratio of 78.6% Fibonacci). Moreover, the RSI starts signaling a downward trend, as the trend is still showing strength above the moving average (100) and (50). Thus, the market is indicating a bearish opportunity below 0.9943, so it would be good to sell at 0.9940 with the first target of 0.9795. It will also call for a downtrend in order to continue towards 0.9733. The daily strong support is seen at 0.9733. On the other hand, the stop loss order should always be taken into account, for that it will be reasonable to set your stop loss at the level of 1.0050.

USD/CAD has been quite impulsive with the bullish gains recently after breaking above the 1.3120 area with a daily close. Despite the recent rate hike by the Bank of Canada, CAD failed to gained momentum over USD that might lead to further bullish gains.

Yesterday, the Bank of Canada's policy statement and overnight rate report was published. The regulator increased the key policy rate to 1.50% from the 1.25% as expected. After certain volatility during the event, CAD lost momentum against USD leading to a bullish daily close above 1.3120 area. Citing BoC officials at the press conference, the central bank has been quite positive about economic growth. On the back of growing tensions due to the trade war between the US and Canada, export sales are being affected that led to a shift in trading sentiment despite the rate hike.

On the USD side, the economic reports published recently were quite positive and helped USD to sustain the bullish momentum in the process. However, the trade war might also undermine USD in the coming days. Today, US CPI and Core CPI reports are going to be published which is expected to be unchanged at 0.2%, Unemployment Claims are expected to decrease to 226k from the previous figure of 231k, and Natural Gas Storage is expected to decrease to 55B from the previous figure of 78B.

As for the current scenario, economic forecasts are quite mixed for the US reports, so such expecftations are going to inject certain volatility in trading. Though the Bank of Canada has been quite optimistic about economic prospects on the grounds of the recent economic reports, analysts expect some correction of USD/CAD. To sum up, USD is expected to gain certain momentum over CAD in the process.

Now let us look at the technical view. The price has been quite impulsive with the bullish gains yesterday that led to a daily close above 1.3120 area but today CAD is struggling for gains. As the price broke above the 1.3120 along with dynamic levels of 20 EMA, Tenkan and Kijun line the price is expected to head higher with a target towards 1.34 resistance area in the future. As the price remains above 1.3050 area, the bullish bias is expected to continue further.

In line with market expectations, the Bank of Canada decided to raise interest rates to 1.5%, making them the highest levels in almost a decade. In response to the rate hike, the Canadian dollar strengthened against the dollar and other major currencies by several dozen points.

Although the increase by 25 basis points to 1.5% caused the main interest rate to be at the highest levels for almost a decade, in Canada the environment of very low rates is still in effect as a result of the 2008 financial crisis, when rates slid in over a dozen months from 4.0% to just 0.25%.

According to today's statement of monetary policy and updated economic forecasts, the Bank of Canada (BoC) expects CPI to slow down to 2.5% and return to target levels in the second half of next year. The gross domestic product should amount to 2.0%, and in 2019 2.2%:

"According to the April report on monetary policy (MPR), the Bank expects the global economy to grow by about 3.75% in 2018 and 3.5% in 2019. The US economy turns out to be stronger than expected, which strengthens market expectations for higher interest rates and leads to an increase in the US dollar. This contributes to financial tensions in some emerging market economies. In the meantime, oil prices have risen. The Canadian dollar, however, is lower, which reflects the strong position of the Canadian dollar and concerns about trade activities. The possibility of greater trade protectionism is the most important threat to global perspectives" comments the global Bank of Canada regarding the global macroeconomic situation.

The Governing Council expects higher interest rates to be justified so that inflation remains close to the target, and will continue to adopt a gradual approach based on incoming data. In particular, the Bank monitors the adjustment of the economy to higher interest rates and changes in the scope of production capacity and wage pressure, as well as the reaction of enterprises and consumers to commercial activities. The next hikes are ahead of us, but they require "cooperation" from the strengthening economy.

Let's now take a look at the USD/CAD technical picture at the H4 time frame. After the BoC decision, the market rallied towards the 50% Fibo retracements at the level of 1.3225 and currently, the price is slowly pulling back from the yesterdays local high. The nearest intraday support is seen at the level of 1.3174, so there is still a chance for another rally toward the key technical resistance at the level of 1.3259 (61% Fibo as well). In a case of a failure at the support, the next target for bears is seen at the level of 1.3126.

The second phase of the trade war between the United States and China did not take long to happen. In less than a few days, the US announced the introduction of new duties on another group of Chinese goods. The list contains 6031 names with a total value of $ 200 bln, new tariffs are planned to be put into operation in 2 months.

The markets reacted extremely painful to the new stage of the escalation. The US dollar sharply increased, while oil prices collapsed, the Shanghai Composite index fell 1.8%, and the yuan fell to 6.7 per dollar.

First and foremost, the new list includes goods and the production of which is being developed as part of the "China-2025" strategy, that is, the US is trying to openly restrict China's economic growth without even trying to mask its ultimate goal. The Ministry of Foreign Affairs of China reacted immediately, according to the official representative of Hua Chunying, China will stand "on the right side of history" and is determined to take all necessary measures to protect its interests.

The increase in tariffs for the next group of goods was already expected, as the US administration warned in advance that it would put them into effect if China responded to the increase on July 6. Moreover, there is a plan to the 450 billion of imports that will be levied on higher tariffs, which corresponds to 90% of all Chinese exports to the US. The introduction of new fees will damage the Chinese economy, but not as significant as one would expect, given the unprecedented scale of the current happening.

Net loss for China's GDP from the introduction of duties at $ 34 billion is about 0.2% according to calculations, which is not a catastrophe. The new increase in tariffs for 200 billion will bring a loss of 0.48%, 400 billion - less than 0.7%. Dependence on China's exports is high, but still significantly lower compared 10 years ago, the Chinese authorities will continue to stimulate domestic demand and will not weaken, but will accelerate the implementation of the China-2025 program.

Earlier, we repeatedly pointed out that the escalation of the trade war is inevitable. The US economic situation is much worse than reflected in the official statistics, and without decisive measures, the budget deficit and public debt will grow at an appalling rate. The attempts of the Trump administration to shift part of the costs to both the main trading partners and the NATO allies are quite obvious and easily predicted actions.

What is the response of China? Given that the trade balance is clearly not in his favor, the only thing that can seriously disrupt Washington's plans is the continuation of the de-dollarization of Chinese exports. China does not have any option than to stop the subsidizing of the US, reducing the volume of exports for dollars. China is the main external buyer of US Treasury bills, and unilateral actions of the United States will lead to the reduction of dollar flow.

The new round of the trade war pushed back the economic factors themselves, but there are certain changes. Producer prices in June showed growth exceeding forecasts, as the annual price growth reached 3.4% which supports inflation expectations.

Today, consumer inflation data will be published in June, showing an increase of 0.2% is expected relative to May, while the annual inflation is projected to grow to 2.9%. If these expectations are realized, the dollar will receive another impetus, as the chances for a Fed rate hike for the fourth time in December this year will increase.

In the short term, the dollar will be in high demand. The USD/JPY pair may rise to 113.80, as the yen as a security asset weakened, while the GBP/USD pair will attempt for re-testing of 1.30, and the EUR/USD will continue to trade in the side range. At the same time, long-term dollar positions look uncertain, much will clarify the Treasury report on the foreign capital inflow in May, which will be published on July 17.

* The presented market analysis is informative and does not constitute a guide to the transaction.

Cryptocurrency Exchange CoinGate launches a pilot program for 100 traders to test transactions on the Bitcoin Lightning Network (LN) variant of their services.

According to the CoinGate blog post, traders participating in the LN sample include, among others, online stores with cryptographic goods, servers and hosting services, and entertainment sites for adults. In the announcement, he notes that payments in the Lightning Network will be available from July 1.

Lightning Network is a solution to the second layer of scalability problems for the Bitcoin network (BTC) that works by keeping most transactions out of the chain.

Rytis Bieliauskas, CoinGate technical director, told Cointelegraph that their pilot program allows them to be the first to test the Lightning network in real life, and thus have practical knowledge and valuable experience regarding the operation of this technology and the possibilities to improve it.

Referring to the Lightning Network as one of the most anticipated events for the community, Bieliauskas also noticed it, although it sees the Lightning Network technology as ultimately helping Bitcoin to become a much faster and lighter carrier of value.

LN technology is still new, "less friendly" to the casual user, so the development of consumer applications will take 1-2 years, and it is more likely that merchants will start using and promoting it more actively. Bieliauskas noted that CoinGate will also cover all costs incurred in the event of loss of funds in the LN process, as the Lightning Network technology is still at an early stage.

A study published at the end of June in which it claimed that the Lightning Network has poor credibility in effectively redirecting payments was rejected by the co-founder of Lightning Labs, as well as other experts in the field of cryptography.

Let's now take a look at the Bitcoin technical picture at the H4 time frame. The market is getting close to the first weekly pivot support at the level of $6,064 after the overnight slump. In a case of a further slide, the next support is seen at the level of $5,900. On the other hand, the level of $6,344 will now act as a technical resistance.

Anxieties related to trade wars are still present and investors are waiting for China's official reply to the announcement of next tariffs from the US, but so far we do not receive new information and the markets used this to calm down. The risk-off mode, which mainly rewards the USD, was switched off for a moment. This gave the opportunity for correction.

AUD/USD bounced from 0.7360 to 0.07380; SEK, NOK, CAD and NZD also moderate. EUR/USD drifts over 1.1670. USD/JPY, after the technical breakout on Wednesday, stays strong on 6-month highs over 112.20.

The stock market uses the moment of silencing concerns about a trade conflict. Shanghai Composite strongly bounce 2.1% and erases Wednesday's drops. The Japanese Nikkei 225 is growing 1.3%.

On Thursday the 12th of July, the event calendar is busy in important data releases and the event of the day is ECB Meeting Minutes release. Moreover, the global investor will get familiar with Eurozone Industrial Production data, Canadian New Housing Price Index, data, US Consumer Price Index data and Unemployment Claims.

Crude Oil analysis for 12/07/2018:

On the commodity market, WTI crude is trying to correct after the Wednesday's slump of -5%. Despite the huge fall in inventories in the US, investors were more focused on fears that the US-China trade war threatens global demand for oil. Reports were also negative that Libya is ready to restore 700,000 output barrels per day after the last downtime. In this market environment, the positive sentiment is very fragile and susceptible to sudden collapse.

Let's now take a look at the Crude Oil technical picture at the H4 time frame. The market has dropped below 38% Fibo at the level of 70.81 and made a local low at the level of 70.10. Currently, the price is trying to bounce higher, but so far no avail as the bulls remain quite weak this morning. The next target for bears is seen at the level of 69.39 which is the 50% Fibo retracement as well. On the other hand, the next technical resistance is seen at the level of 72.13 and only a sustained break through this level will change the bias from bearish to bullish.

After making a double top pattern on the 4-hour chart, crude oil has just breached and closed below the neckline support at $72.54. As we see the stochastic oscillator has already entered the oversold Area. We expected #CL to go upward as the next move to re-test the previous neck support, which has become the neckline resistance. As long as the price stays below and does not close above the $74.65, 60% of the time crude oil is going to trade with the bearish bias.

On the 4-hour chart, we see that gold carried out its downmove after touching the key support level at $1,240.73. At the same time, the Stochastic Oscillator has already got into the oversold area. Now, the price seems to head upward up to make correction as the requirement for clear-cut trend before the price resumes its previous bearish trend. Gold is likely to test between the 21-period moving average. Otherwise, we will see the upper channel from the down slope channel or back to the SBR (Support Become Resistance) Zone 1260.52 - 1269.87. As long as gold does not break out and closes above the $1,269.87 level, the odds are that gold will resume its previous bearish bias.

he EUR/USD pair has broken through our support levels we mentioned yesterday and reached our target of the 4-hour Ichimoku cloud support above 1.1650. Short-term trend is now challenged. A break inside the cloud will change trend to neutral from bullish. A great risk reward for bulls at current levels as EUR/USD is above important support.

Resistance is at 1.1710 and next at 1.1760. The second resistance is the same as yesterday and where price got rejected. Will the Kumo (cloud) provide the bounce today? Great risk reward for going long at current levels with a tight stop at 1.1650. If EUR/USD starts new upward move from current levels which is very likely, we will see a move towards 1.19-1.20. A break below support however will increase the chances of a move to new lows towards 1.12-1.13.The material has been provided by InstaForex Company - www.instaforex.com

Gold price is back to its 2018 lows on the long-term support trend line. Gold price is oversold. Gold price is at major support area that justifies a $60 rally. Gold price remains in a bearish short-term trend. Yes, lower levels are possible towards $1,200, but the next big move is upside.

Green line - long-term support

Red line - long-term resistance

Magenta lines - bearish channel

The Stochastic oscillator is at the oversold levels. In the past, the price staged impressive moves higher when the stochastic was so low. An upward turn by the stochastic will be a bullish sign for Gold price. Gold price is way undervalued here and I remain bullish adding to longs. I believe these price levels are a gift for bulls.

When the European market opens, some Economic Data will be released such as Industrial Production m/m, French Final CPI m/m, and German Final CPI m/m. The US will also release the Economic Data such as Federal Budget Balance, 30-y Bond Auction, Natural Gas Storage, Unemployment Claims, Core CPI m/m, and CPI m/m, so amid the reports, EUR/USD will move in a low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Breakout BUY Level: 1.1733.

Strong Resistance:1.1726.

Original Resistance: 1.1715.

Inner Sell Area: 1.1704.

Target Inner Area: 1.1676.

Inner Buy Area: 1.1648.

Original Support: 1.1637.

Strong Support: 1.1626.

Breakout SELL Level: 1.1619.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all Traders or Investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

In Asia, Japan today will not release any Economic Data, but the US will release some Economic Data such as Federal Budget Balance, 30-y Bond Auction, Natural Gas Storage, Unemployment Claims, Core CPI m/m, and CPI m/m. So there is a probability the USD/JPY pair will move with low to medium volatility during this day.

TODAY'S TECHNICAL LEVEL:

Resistance. 3: 112.80.

Resistance. 2: 112.57.

Resistance. 1: 112.36.

Support. 1: 112.08.

Support. 2: 111.86.

Support. 3: 111.64.

Disclaimer: Trading Forex (foreign exchange) on margin carries a high level of risk, and may not be suitable for all Traders or Investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.

Yesterday, the pound almost completely repeated the acrobatic sketch performed by a single European currency. And if the reverse movement to the top is more or less clear, since in both cases the whole thing is in the news from the US, then the pound declines on its own initiative. Not only that in the UK disputes over the agreement on the withdrawal of the United Kingdom from the European Union have escalated, the growth rates of industrial production slowed down from 1.6% to 0.8%, but they were waiting for the acceleration of growth to 1.9%. In addition to all the final data on GDP for the first quarter confirmed the fact of a slowdown in economic growth from 1.3% to 1.2%. So it becomes clear that divorce with Europe for the UK will not do without consequences.

However, everything returned to where it already began towards the evening. his is due to two news from the US. The first was data on open vacancies, whereas the number fell from 6,840 thousand to 6,638 thousand. given the recent data on unemployment, a reduction in the number of open vacancies suggests that it is not yet worth waiting for the decline in the unemployment rate. On the contrary, the probability of its further growth is high. The second news was the statements of Donald Trump. The US president once again told the Europeans that they are not fulfilling their NATO commitments, or rather are spending too little on maintaining a military alliance. The forty-fifth president of the USA asked a direct question about when Europeans intend to compensate the US for losses. That is, Donald Trump once again invoices Europe for payment. Also, Americans seemed to have few of those duties, which they introduced in relation to goods from China for a total of $ 50 billion, and they decided to expand the list of goods by another $ 200 billion. Everyone understands that the response will follow and they do not bear anything good for American business.

Today, there is the data on producer prices in the US, wherein growth rates should accelerate from 3.1% to 3.2%. On the eve of the publication of inflation data, this is a pretty good result, as it confirms the assumptions of market participants that inflation in the US continues to grow. True, the growth rate of average hourly wages is lower than inflation, which can lead to a decrease in consumer activity. However, it is this development that may force the Fed to double the refinancing rate twice before the end of this year. Thus, the acceleration of the producer price growth rates will be welcomed with optimism. Also, the enthusiasm for the Fed being able to raise the refinancing rate more actively will allow ignoring data on commodity stocks in wholesale warehouses, which should grow by 0.5%.

If the data on producer prices coincide with the forecasts or will be better, the pound will drop to 1.3215. However, If it turns out that the rate of growth in producer prices in the US is declining, the pound could rise to 1.3350.

The hourly EUR/USD chart presented here indicates that the currency pair is dropping in a corrective manner since printing highs at the 1.1790 levels recently. At this point in time, prices are finding support at a past resistance turned support zone around the 1.1660/70 levels. According to the Fibonacci extensions displayed here, it remains quite possible for the pair to drop through the 1.1650/30 levels to find further support before turning higher. The price support is seen at the 1.1590 levels, followed by the 1.1530 levels, respectively, while interim resistance is seen at the 1.1790 levels. Most probable direction is to push higher at least one last time towards 1.1850 and above, before reversing lower again. Please note that in the medium term, till the prices remain below the 1.2150 levels, bears shall be in complete control.

Trade plan:

Aggressive traders, now look to buy again between the 1.1630/60 levels, with stop below 1.1550 and target above 1.1850.

Buyers could not catch hold of resistance at 1.3257 in the morning. For another attempt of pound growth, a second exit beyond 1.3257 is required, which could lead to an update of the daily high near 1.3296 and a further rise in GBP / USD to the resistance of 1.3359. If the pound drops in the afternoon, you can count on the support level of 1.3189.

To open short positions for GBP / USD pair, you need:

While the trade is below 1.3257, the pressure on the pound will be maintained, and the repeated support test of 1.3223 will lead to a larger sellout of GBP / USD with the release of new lows of 1.3189 and 1.3157 to the region. In case of a pair growth in the second half of the day above 1.3257, you can return to sales after updating the resistance of 1.3296.

The upward movement of the previous days indicates a bullish priority. Yesterday, there was a test of the main support for weekly control zone 1/2 1.1698-1.1689, which led to an increase in demand and the formation of the next portion of the ascending model.

Holding the price of the above-mentioned calculation for NKZ 1/2 1.1698-1.1689 indicates the continuation of the formation of the upward medium-term model. It is important to note that there was a consolidation above the weekly KZ 1.1729-1.1711 this week, which indicates a 70% chance of further growth to the target zone NKZ 1/2 1.1830-1.1821, testing this level will complete the next phase of the upward momentum. The formation of the last two daily candles indicates the presence of both demand and supply. Hence, the American session should close above this level today in order to continue growth.

Short trades do not have a favorable risk-to-profit ratio, so it's pointless to consider them today. The trade plan indicates the need to hold purchases made from the NKZ 1/2 1.1698-1.1689 to the NKZ 1/2 target zone 1.1830-1.1821.

For the reversal model formation, it will require the growth absorption of the three-day prescription and fixing the price below the 1.1689 level. This will open the way for the formation of the medium-term downward movement and the target is the weekly KZ 1.1607-1.1589. For this reason, short transactions will move forward not earlier than tomorrow's European session if the closing of today's trading will be below the 1.1689 level. Purchases are beneficial in terms of the risk-to-profit ratio and the probability of completing the pattern within this range.

Daytime CP is the daytime control zone. The zone formed by important data from the futures market, which change several times a year.

Weekly CP is the weekly control zone. The zone formed by important futures market marks, which change several times a year.

Monthly CP is the monthly control zone. The zone which is a reflection of the average volatility over the past year.

* The presented market analysis is informative and does not constitute a guide to the transaction.

The unexpected news that the US will still expand customs duties on imports from China to a total of $ 200 billion, again reminded investors of the fragility of the situation surrounding trade wars.

Today, the White House announced the expansion of customs duties on imports from China in the total amount of $ 200 billion. Earlier last Friday, trade duties worth $ 34 billion were already in place. Markets regarded this as a lesser evil, and on this wave, as well as on expectations of positive results of corporate reporting of companies for the second quarter, began to buy risky assets, primarily shares of companies. But today's news though and assumed such a probability, but not so quickly and not in such a general amount.

It was supposed, and indeed D. Trump himself stated that duties can cover Chinese products only 100 billion dollars. And the president's words were perceived as an act of intimidation. But that did not happen. It seems that the new act of the "Marlezon Ballet" has begun. Now we should expect some kind of response from the Chinese authorities. And all this in aggregate will undoubtedly have a negative impact on the risk of the appetite of market players. Trades in China ended in a fall in major stock indexes. Europe has already opened with a fall in major stock indices, while futures for indices in the US demonstrate a negative trend.

Based on the current situation, it can be assumed that the defensive assets-the Japanese yen, the Swiss franc, the US dollar and, of course, the government bonds of the economically developed countries, where the first fiddle will be played by the US Treasury government securities, will be in demand. Already today at the auctions in Europe these assets receive support. In electronic trading in the US, the profitability of the benchmark of 10-year Treasuries falls at the moment by 1.41%, to 2.833%.

In the foreign exchange market, in our opinion, the commodity and commodity currencies will, first of all, have problems with growth, following the decline in quotations for commodities and crude oil. At the auctions in Russia, the ruble opened a noticeable decline in relation to the euro and especially to the US dollar. In the Forex market, most likely, the Australian dollar will continue to decline. And as for the dynamics of the Canadian currency, if the CBA does not decide to raise the interest rate, it may collapse under the pressure of this factor and lower oil prices.

Forecast of the day:

The AUD / USD currency pair is trading below the 0.7400 mark. A fall below this level could be the reason for the price decline to 0.7360, and then to 0.7300-10.

The USD / CAD currency pair is trading at 1.3155. The decision of the Central Bank of Canada not to raise interest rates or escalation of trade wars can lead to lower prices for crude oil, and with it the Canadian currency rate. Against this background, overcoming the price could lead to the pair's growth to 1.3200.

News that the US is introducing new duties on Chinese goods, led to a sharp drop in commodity currencies. In particular, the decline was observed in tandem with the Canadian and Australian Dollars.

As it became known, the White House yesterday announced the introduction of duties on goods from China worth $ 200 billion, while the presidential administration said that they hoped to continue trade negotiations with China. How, after the new more stringent measures on the part of the US will be negotiated, even difficult to imagine. The White House said that they will try not to impose new duties on consumer goods, but this is far from true.

As it became known, new duties are mostly designed for consumer goods. Tuna, salmon, tires, leashes for dogs, bags, baseball gloves, furniture, clothes, mattresses, electric lamps, telephone parts, flat TVs and a number of other goods fall under trade duties.

It also became known that the introduction of fees will occur two months later. The approximate date is August 20-23. This is not done to ensure that China has managed to come to an agreement with the US but to ensure that US companies are able to give feedback on the goods chosen for restrictions.

The Ministry of Commerce of China immediately announced that they will take measures in response to US duties on Chinese goods worth $ 200 billion. According to the Chinese authorities, the new US measures are completely unacceptable.

As I noted above, commodity currencies, including the Australian dollar, fell sharply against the US dollar.

Despite good data on the number of approved housing loans in Australia, there is no demand for the Australian dollar.

According to a report by the Australian Bureau of Statistics, the number of approved housing loans in Australia in May this year rose by 1.1% compared with April, while economists predicted a fall of 2%.

The Canadian dollar also fell sharply against the US dollar, despite good data on the number of bookmarks for new homes in Canada.

According to the report of the Mortgage and Housing Corporation of Canada, the number of bookmarks in June this year increased by 27.9%, to 248 138 units per year. Economists expected the growth of mortgages of new homes to 210,000 units per year.

A breath of fresh air after the release of data on the US labor market, gold once again loses ground under the background amid the escalation of the trade conflict between Washington and Beijing. China responded to US import duties with equivalent tariffs of $ 34 billion, which the White House did not like. The States are beginning to develop new measures in the field of protectionism. This time by $ 200 billion under 10%, which the Celestial Empire cannot answer the same. The fact is that Chinese exports to the US in 2017 exceeded $ 500 billion, and the US to China did not reach $ 200 billion. However, Beijing has other trump cards in its sleeve.

Dynamics of Chinese and US exports

Theoretically, gold is in a favorable environment for itself, the more surprising its weak positions look. As an asylum-seeker, it must benefit from a trade war that potentially has to slow down the global economy. Acceleration of US inflation in the conditions of stubborn refusal to bet on 10-year US Treasuries exceed 3% leads to a fall in the real yield of Treasuries, which is a bullish factor for XAU / USD. Yes, there is a slowdown in Indian demand (imports fell by 40% to 343 tonnes in the first half of the year), but prices within the country are declining, and the seasonal factor testifies to their recovery by the end of summer.

The main driver of the peak of precious metal is a strong dollar. The divergence in the monetary policy of the Fed and the central bankers-competitors, including the ECB, as well as the high demand for the American currency due to the escalation of the trade conflict between the States and the Celestial led to the best quarterly result of the USD index since the victory of Donald Trump in the presidential election. Not the least role in this process is the dispersal of US GDP in the second quarter. The figure is likely to exceed 4% q / q, which is a "bearish" factor for XAU / USD. However, in the second half of the year, the situation can dramatically change. The effectiveness of the fiscal stimulus will fall, since in full employment and the economy at full capacity, its effectiveness is lower than during the recession. In addition, trade wars will lead to the dispersal of inflation and to a reduction in jobs due to the transfer of production to other countries.

From the point of view of seasonality, there is not much left to endure gold. Traditionally, it declined in May and June, did not feel very good in July, but in August and September, it regained lost ground. For sure, this will be facilitated by a potential correction in the US stock market. More than 40% of the profits of American companies come from abroad, and the revaluation of the dollar will worsen corporate reporting.

Technically, the update of the July low will increase the risks of continuing the peak of precious metal in the direction of $ 1215 per ounce. On the contrary, the breakthrough of the resistance at $ 1266 will activate the "Bat" pattern and will open the way for the bulls to its targets by 88.6%. It corresponds to $ 1,300 an ounce.

The euro/dollar pair can not choose the vector of its movement on the third day. The hourly chart of this pair resembles a cardiogram, with impulse jumps and price dips in a fairly narrow range. The higher time frames (H4 and higher) also show the weakness of both bulls and bears of the EUR/USD.

Abstracting from the theme of the US-China trade war, it should be noted that the fundamental background contributes to the strengthening of the European currency. The two-month rise in inflation in the Eurozone countries gave impetus to the tightening of the rhetoric of the ECB members. And both in the public media space and in the behind-the-scenes atmosphere, when sources of insider information prefer to remain anonymous.So, last week the single currency rose on rumors that the European Central Bank may raise the rate before the expected date. After that, the probability of a rate hike in September next year increased significantly, although before that market expectations were associated with the last meeting of the ECB in 2019 in December.

So, last week the single currency rose on rumors that the European Central Bank may raise the rate earlier than the expected date. After that, the probability of a rate hike in September next year increased significantly, although before that market expectations were associated with the last meeting of the ECB in 2019 in December.

Furthermore. On Wednesday, another American news agency published the news that the members of the regulator are considering two scenarios of tightening monetary policy next year. One scenario involves a rate hike in September, the other – in July. According to insider information, the opinions of the regulator's members on this issue are divided. But even taking into account the existing disagreements, this fact suggests that, a) the European Central Bank does not intend to extend the QE after December 2018; b) the position of Mario Draghi that "the rate will be at the current level for a long time after the curtailment of the stimulating program", to put it mildly, it does not correspond to the real intentions of the regulator; C) there are hypothetical chances that the rate can be raised before September 2019.

This information, which was published on the basis of unnamed sources in the ECB, is consistent with the public position of some members of the regulator. In particular, the head of the Bank of France, which is also a member of the European Central Bank, Francois Villeroy today noted that the rate can be raised "not before the summer of next year." According to the voiced position, the July rate increase cannot be excluded. Mario Draghi, who spoke in Germany today at the opening ceremony of the international economic conference, did not talk about the prospects of monetary policy. But earlier he positively assessed the dynamics of inflation growth in the Eurozone, predicting in the medium term the achievement of the target level. The main risk for the EU economy Draghi identified trade barriers on the part of the United States.

The notorious trade war, declared by Donald trump to the leading countries of the world, is now the main "headache" of the ECB. It is this factor that holds back the euro for full growth-not only in tandem with the dollar, but throughout the market. The escalation of the US-EU trade conflict will not only destroy traders ' hopes for a quick tightening of monetary policy in the Eurozone, but will also increase the likelihood of QE action prolongation. At the last EU summit, Mario Draghi warned the leaders of European countries about the catastrophic consequences of a full-scale war between Washington and Brussels.

However, US-European trade relations are still subject to resuscitation (unlike the US-Chinese). July will play a key role in this context. Many factors will influence the final result, but first of all it is about the tariff policy of Washington in relation to European cars. German Chancellor Angela Merkel has made it clear that she is ready to make concessions, depending on what decision the relevant Committee will take in the US, which is conducting an appropriate investigation on the import of cars from Europe. A week later, on 19-20 July, there will be an open hearing on this issue, and at the end of the month the Committee must make a verdict, deciding the fate of the new duties. Approximately in the same period of time, the head of the European Commission Jean-Claude Juncker will visit the White house. If by this time the issue of tariff policy is resolved, the dialogue with Trump will be held in a positive way. This fact will allow us to talk about the de-escalation of the trade war, which will have a positive impact on the European currency.

As we can see, there are too many "if"in the above scenario. That is why the euro is on standby mode, reacting sharply to any negative factor associated with US-European relations. But the European currency, on the contrary, ignores positive rumors. By and large, the announced intentions of the central bank will be useless if Brussels and Washington follow the "Chinese way".

Thus, the situation for the EUR/USD pair is in limbo, and traders ' mood depends mainly on the dynamics of the external fundamental background. The release of US inflation, which is scheduled for Thursday, may somewhat "stir up" the pair, especially if the indicator comes out worse than expectations. But in the long term, the pair will still depend on news from the "front" of the trade war.

Technically, the pair is trading in the range of 1.1645-1.1780 (the average line of Bollinger Bands crossed with the Tenkan-sen line and the upper line of Bollinger Bands, respectively). A breakout, and most importantly consolidation, above or below the indicated levels will increase the pressure or support for the pair. However, it is impossible to talk about the most probable vector of price movement now, as the market has been at the actual price crossroads for several days. US inflation may push the price into one side, but the external fundamental background will still play a dominant role for the pair.

Yesterday, we witnessed that investors do not believe in the prospects of a single European currency. European analog of the dollar so famously left from side to side, that already captured the spirit. The rapid downward movement began, in fact, from scratch. Participants in the mass sale market noted the publication of ZEW research, which usually does not have a significant impact. First came out data on Germany, where the sentiment index in the business environment fell from -16.1 to -24.7, and the index of assessment of current economic conditions decreased from 80.6 to 72.4. The single European currency immediately began to lose its positions, and this trend only intensified when it became known that the index of economic sentiment in Europe fell from -12.6 to -18.7. From the indices themselves, we can conclude that European business is looking to the future without much enthusiasm. Well, the market reaction shows that investors do not see any prospects of investing in the European economy.

However, already towards evening, everything returned to where it began. This is due to two news from the US. The first was data on open vacancies, the number of which fell from 6,840 thousand to 6,638 thousand, and, given the recent data on unemployment, a reduction in the number of open vacancies suggests that it is not yet worth waiting for the decline in the unemployment rate. On the contrary, the probability of its further growth is high. Well, the second news was the statements of Donald Trump. The US President once again told the Europeans that they do not fulfill their obligations on NATO, or rather spend too little on maintaining a military alliance. The forty-fifth president of the USA asked a direct question about when Europeans intend to compensate the US for losses. That is, Donald Trump once again invoices Europe for payment. Also, Americans saw few of the duties they imposed on goods from China for a total of $ 50 billion, and they decided to expand the list of goods by another $ 200 billion. And everyone understands that the response will follow and they do not bear anything good for American business.

Today, there are data on producer prices in the US, whose growth rates should accelerate from 3.1% to 3.2%. On the eve of the publication of inflation data, this is a pretty good result, as it confirms the assumptions of market participants that inflation in the US continues to grow. True, the growth rate of average hourly wages is lower than inflation, so this can lead to a decrease in consumer activity. However, it is this development that may force the Fed to double the refinancing rate twice before the end of this year. So, the acceleration of the producer price growth rates will be welcomed with optimism. Also, the enthusiasm for the Fed being able to raise the refinancing rate much more action will allow ignoring data on commodity stocks in wholesale warehouses, which should grow by 0.5%. But the reserves have been growing for several months in a row.

High probability that by the end of the day the euro will fall to 1.1675. But this is only if the forecasts for producer prices are justified. If they suddenly start to decline, then it is worth waiting for the growth of the euro to 1.1800.

For Gold, the key levels on the H1 scale are: 1265.51, 1259.40, 1256.13, 1245.49, 1242.12, 1239.59 and 1232.43. Here, we follow the downward structure formation from July 9. The downward movement is expected to continue after the breakdown of 1245.49, and in this case the target is 1242.12 near the consolidation level. Passage at the price of the noise range 1242.12 - 1239.59 will allow to consider the movement to the potential target at 1232.43 (the expected date of reaching is on July 13 - 14), we expect a rollback to the top upon touching this level.

Short-term upward movement is possible in the corridor 1256.13 - 1259.40, the breakdown of the last value is projected to build an upward structure with the target at 1265.51.

The main trend is the formation of a downward structure from July 9.

Trading recommendations:

Buy: 1256.20 Take profit: 1259.20

Buy: 1260.00 Take profit: 1265.00

Sell: 1245.20 Take profit: 1242.30

Sell: 1239.30 Take profit: 1233.00

* The presented market analysis is informative and does not constitute a guide to the transaction.

On Tuesday, the US said it was preparing a new list of goods from China for $ 200 billion to impose duties on it in 10%. This "answer to the answer" of China is a new blow to the US over China during the trade war. Previously, the US had already imposed duties on 34 billion dollars of goods from China, China responded with duties on agricultural products from the United States.

The US trade representative Laitizer said that the US is ready to negotiate with China to settle US claims about "unfair trade practices" and theft of intellectual property by China. Earlier, the US-China trade negotiations took place, but they did not yield any results.

China has so far answered only with contemptuous comments in the official media - "The US behaves like a bull in a Chinese store," "The US undermines globalization and the trade order."

New US tariffs will not take effect for another 2 months - to give business in the United States the opportunity to discuss the list of goods falling under duties - and the opportunity for US-China talks. Public discussion of the list of goods is scheduled for August 20-23.

The new list of products includes a large number of consumer goods - fish, clothing, footwear, furniture, components for phones and flat displays, etc.

Such a wide list will inevitably affect the mass consumer in the US, causing a rise in prices.

China responded to the first installment of US duties on the "dollar-for-dollar" principle - charging goods worth $ 34 billion in return. Trump said earlier that in the case of Chinese return duties, he would add another 200 billion dollars after the list of 200 billion dollars - thus, Trump's duties would amount to approximately $ 450 billion of goods from China under tax - almost all goods when imported from China at 505 billion dollars.

Former US Treasury Secretary Lawrence Summers has criticized Trump's policy - it will lower the purchasing power of Americans, worsen the conditions for US businesses in China, worsen relations with China and increase the risk of military confrontation in the future.

The chairman of the US Senate Finance Committee also spoke out against new tariffs - although he supports the fight against China's dishonest trade practices and for more fair relations, but considers the new list to be an incorrect move by the US.

The current week's movement indicates the formation of a local accumulation zone, which was formed between the two control zones. The resistance is the weekly short-term fault 1.3329-1.2294, support - NCP 1/2 1.3234-1.3222.

Yesterday and the day before yesterday, there was a test of NCP 1/2 1.3234-1.3222, which led to an increase in demand. This indicates a higher probability of continuing the upward movement and updating the July high in the short term. In the case of continuing growth, special attention should be paid to the repeated test of a weekly short-term fault of 1.3329-1.3304. If a large offer appears again above the indicated zone, the pair will continue to trade within the framework of the flat, which will enter the medium-term stage. To confirm the upward momentum, the closing of today's US session above level 1.3329 is required. In this case, the next growth target will be the NCP 1/2 of 1.3470-1.3457.

Purchases today are possible only in the case of a second test of the NCP 1/2 1.3234-1.3222, as in this case, the risk-to-profit ratio will exceed 1 to 3, which will make our deal profitable.

To disrupt the upward momentum, today's US session will be closed below the level of 1.3222. This will indicate the completion of the upward cycle and determine the trade for the second half of the week. The first goal of the fall will be a weekly short-term fault of 1.3106-1.3081. Trade will go into the phase of the flotation, where fixations are required at significant monthly extremes and the search for entry points from the range boundaries.

The daily short-term fault is the daytime control zone. The zone formed by important data from the futures market, which change several times a year.

The weekly short-term fault is the weekly control zone. The zone formed by important futures market marks, which change several times a year.

The monthly short-term fault is the monthly control zone. The zone, which is a reflection of the average volatility over the past year.

The currency pair EUR / USD on July 9 worked perfectly Murray level "5/8" and began a downward correction. Mario Draghi did not say anything super important on his speech yesterday, emphasizing the importance and significance of the quantitative incentive program for stabilizing the economy and increasing inflation. Today, on July 10, no important reports and speeches are being planned in the European Union and the United States. Thus, the volatility of the trading instrument may remain low (if Donald Trump does not present any surprises), and the main factors affecting the pair will be technical ones. Proceeding from this, the correction may continue for the purpose of moving, and the signal to its completion may be the turn of the indicator of Heikin Ashi upward. A strong overbought of the CCI indicator has already begun to be developed. The younger linear regression channel turned upward and now supports the bulls in the medium term.

Nearest support levels:

S1 = 1.1719

S2 = 1.1658

S3 - 1,1597

Nearest resistance levels:

R1 = 1.1780

R2 - 1.1841

R3 = 1,1902

Trading recommendations:

The currency pair EUR / USD began to be corrected. Therefore, today it is recommended to expect the completion of the correction, after which to open new long lines with a target of 1,1780. The color of 1-2 bars in the purple color will indicate the end of the downward correction.

It is recommended to open the sell orders after the bear has crossed the moving middle line with the target of 1,1658. In this case, the tool will have a chance to resume the downtrend.

In addition to the technical picture, one should also take into account the fundamental data and the time of their release.

Explanations for illustrations:

The upper channel of linear regression is the blue lines of unidirectional motion.

The lowest linear regression channel is the violet lines of unidirectional motion.

The Bank of Canada will hold its July meeting on Wednesday. The probability of a rate hike at this meeting is more than 80%, but the Canadian dollar on the eve of the meeting of the regulator is behaving uncertain – in conjunction with the US currency, the "Loonie" trampled at the base of the 30th figure.

By and large, the traders of the USD/CAD pair have long been ready for the fact that the regulator will raise the interest rate in July or September. This has been repeatedly hinted at by members of the Canadian central bank over the past few months. In particular, Stephen Poloz last Thursday almost directly announced the imminent tightening of monetary policy against the background of positive dynamics of inflation. After his speech, the probability of a rate hike on July 11 increased from 50% to 80%. Therefore, we can say that traders have largely played this fact – over the past two weeks, the pair has fallen from the middle of the 33rd figure to the bottom of the 30th price level.

Given the experience of such situations (when the regulator's decision is largely predictable), there is no need to expect a rapid reaction to the very fact of the rate hike. The main attention of traders will be focused on the rhetoric of Stephen Poloz, who will hold a press conference an hour after the announcement of the meeting results. Market participants will be interested in the main issue – the future prospects of monetary policy, taking into account the growth of key macroeconomic indicators, and most importantly – taking into account the ambiguous trade relations between the US and Canada.

There should be no special claims to the dynamics of macroeconomic indicators, except for the latest release on the labor market. The fact that at the end of last week in Canada were published several conflicting data. The unemployment rate unexpectedly rose to 6%, although most experts said that the figure will remain at the same level – 5.8%. At this level, the indicator went out for four consecutive months, so its sudden growth was frankly disappointing.

As a counterbalance, data were provided on the growth in the number of employed. This figure reached almost 32 thousand - this is the fastest growth rate since December last year. The share of the economically active population also increased to 65.5%, despite the rather weak forecasts of experts. The average hourly rate, which is closely monitored by the Bank of Canada, increased by 3.6% last month.

In other words, the only flaw of the "Canadian non farm" is the unexpected rise in unemployment – as well as in the US. A number of experts explain such dynamics by the completion of the academic year and the search for temporary work by students. Others warn of a possible slowdown in the labour market, although there are fewer such pessimists. Stephen Poloz also hardly focuses on this fact - it is too early to talk about any negative trends. But the issue of Canada's foreign trade relations with the United States may affect the tone of his rhetoric.

Negotiations on the revision of the North American Free Trade Agreement (NAFTA) have been ongoing for a year, and have recently been suspended in connection with the presidential elections in Mexico. The election was over, the newly elected head of state expressed a desire to resume negotiations, but then the time-out took Donald Trump. He decided not to take any action until the midterm elections to the Lower House of Congress, which will be held on November 6. Thus, the fate of NAFTA again hovered in the air - most likely, before the end of this year.

The very fact of uncertainty in this matter is unnerving for the regulator: the head of the Bank of Canada has repeatedly spoken about NAFTA in the context of potential risks. But, unfortunately, this is not the only negative factor.

Let me remind you that on June 1, Washington removed Canada from the list of "beneficiaries", approving duties on imported steel and aluminum products – at the rate of 25% and 10%. The Canadians were not in debt and announced a response to economic measures against some American products. The response measures came into force only recently – on July 1. In turn, Donald trump is not going to stop there: he has repeatedly expressed his intention to introduce duties on imported cars and parts. For Canada, this will be a significant blow, as the country's automotive industry mainly consists of assembly plants of auto giants, and 70% of production is exported to the United States. At the moment, this Trump initiative is being studied by the relevant committee, so market passions on this issue have subsided slightly. However, it is impossible to exclude this factor from the list of risks.

In summary, macroeconomic indicators are helping to raise rates at Wednesday's meeting. However, this fact is already largely embedded in current prices. If Stephen Poloz focuses his attention on uncertainty, the loonie may be under pressure, despite the tightening of monetary policy. This scenario will trigger the growth of the USD/CAD pair to at least 1.3200, where the average line of the Bollinger Bands indicator coincides with the Tenkan-sen line on the daily chart.

During the trades on July 9, the GBP / USD fell from the maximum of the day by 175 percentage points, but by the end of the day still returned some of the lost positions. Nevertheless, this reduction allows us to assume the completion of the construction of future wave 4, 3, a. If this is the case, then the pair will continue to decline within wave 5 with targets located near the estimated level of 1.3054, and possibly lower. The entire wave 3, a, assumes the form of a diagonal triangle, as expected. The fundamental component is currently supported by the US dollar, increasing the chances of implementing a variant with a downward trend segment.

The objectives for the option with purchases:

1.3445 - 0.0% of Fibonacci (formal goal)

The objectives for the option with sales:

1.3054 - 161.8% of Fibonacci

1.2962 - 200.0% of Fibonacci

1.2809 - 261.8% of Fibonacci

General conclusions and trading recommendations:

The GBP / USD currency pair supposedly completed the construction of wave 4, 3, a. If this is the case, then now it is expected to fall further, and I recommend selling the pair with targets near the calculated marks of 1.3054 and 1.2962, which corresponds to 161.8% and 200.0% of Fibonacci. Breaking the high of July 9 will lead to the need to refine the current wave counting.